Gold prices were largely unchanged in Thursday’s Asian session, hovering near weekly lows as safe-haven demand offset pressure from a stronger United States dollar.
By 3:35 pm AEST (5:35 am GMT), spot gold was up just $4.50, or 0.1%, at US$3,373.73 per ounce.
The precious metal found modest buying interest early Thursday as geopolitical tensions in the Middle East escalated, following reports that the United States is considering military action against Iran as early as this weekend.
Risk sentiment soured across Asian markets after several media outlets reported on potential U.S. intervention, raising fears of a broader regional conflict.
The news follows comments from Iran’s Supreme Leader Ayatollah Ali Khamenei, who warned on Wednesday that any American military involvement would cause “irreparable damage” and reiterated Iran’s refusal to surrender.
Despite the renewed geopolitical tensions, gold’s upside was limited by a firmer U.S. dollar, which continued to attract haven flows. The dollar extended gains made after the Federal Reserve left its benchmark interest rate unchanged on Wednesday but maintained its outlook for two rate cuts in 2025.
While the Fed held rates steady in the 4.25%–4.5% range, policymakers revised their longer-term projections, signalling fewer cuts in 2026 and 2027. They also downgraded growth expectations and raised the inflation forecast, citing increased risks driven by ongoing tariffs and global instability.
With the Juneteenth public holiday approaching in the United States, trading volumes are expected to be lighter, with reduced liquidity potentially exaggerating price moves, especially if geopolitical headlines intensify.
